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Sonata Software Ltd. Stock Analysis

Small Cap
Evaluated by 1929 users | BSE: 532221 | NSE: SONATSOFTW |
IT - Software
Sonata Software started off as a product company in the fledgling days of the Indian IT industry, Sonata has had a history of innovation. Be it in its design of solutions aligned to customer needs, or in the creation of robust processes that form its very foundation, or in its unique growth...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Sonata Software Ltd. has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
Value Creation
Value Creation Index Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 16.56%4.08%9.09%19.07%32.25%27.56%26.36%27.13%32.71%42.92%
Value Creation Index 0.28-0.68-0.300.481.501.131.041.101.532.32
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 252225233334467505593689829877
Y-o-Y Gr. Rt.--10.7%3.3%43.4%39.9%8.1%17.4%16.2%20.5%5.7%
Adjusted EPS (Rs.) 4.771.192.75.910.4710.4811.4812.5316.1317.99
Y-o-Y Gr. Rt.--75.1%126.9%118.5%77.5%0.1%9.5%9.2%28.7%11.5%
Book Value per Share (Rs.) 29.8528.429.4530.3633.9834.2745.1547.3451.135.65
Adjusted Net Profit 50.212.528.462110110119130168187
Net Op. Cash Flow (Rs. Cr.) 45.27.322.258.383.482.497.314937.1281
Debt to Cash Flow from Ops 000.760.10.061.170000
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Sonata Software Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 14.8%13.4%14%5.7%
Adjusted EPS 15.9%11.4%16.2%11.5%
Book Value per Share 21-7.6-30.2
Share Price 34.6% 16.2% 14.6% 12.3%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 16.564.089.3319.7232.5430.7128.7627.132.741.23
Operating Profit Margin (%) 13.91.6715.2720.5426.3125.1924.9523.2227.3222.97
Net Profit Margin (%) 19.895.5412.1918.5823.5821.8320.118.8920.221.31
Debt to Equity 000.050.020.010.270000
Working Capital Days 215288320225191221178134142147
Cash Conversion Cycle 79856230224252526367
Entity Percentage Holding
Promoters 28.17%
Institutions 24.02%
Non-Institutions 47.81%
Pledged *1.151.150.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Sonata Software Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Sonata Software Ltd. is a average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Sonata Software Ltd.'s performance infers:

Sonata Software Ltd. earnings have grown by 11.4%, whereas share price has appreciated 16.2% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Sonata Software Ltd. share prices over the last 10 years. Here is what we found out:

Sonata Software Ltd. share price has appreciated 22.4% annually over the past ten years.

Sonata Software started off as a product company in the fledgling days of the Indian IT industry, Sonata has had a history of innovation. Be it in its design of solutions aligned to customer needs, or in the creation of robust processes that form its very foundation, or in its unique growth strategy, innovation in Sonata is pursued with a passion. Headquartered in the garden city of India -- Bangalore -- with a customer base spread across the globe, one can find Sonata

Sonata Software started off as a product company in the fledgling days of the Indian IT industry, Sonata has had a history of innovation. Be it in its design of solutions aligned to customer needs, or in the creation of robust processes that form its very foundation, or in its unique growth strategy, innovation in Sonata is pursued with a passion. Headquartered in the garden city of India -- Bangalore -- with a customer base spread across the globe, one can find Sonata offices in the US, Europe, Middle East and the Asia-Pacific.

Sonata's services range from IT Consulting, Product Engineering Services, Application Development, Application Management, Managed Testing, Business Intelligence, Infrastructure Management, Packaged Applications to Travel Solutions. Sonata Software was ranked among the Top 20 IT Software and Service Exporters in India by NASSCOM for the FY 07-08 and regularly wins Industry Awards.

At the heart of Sonata is the promise to provide enduring value to all its key stakeholders and constituencies. Be it delivering well thought out solutions for its customers, offering business partners a continually profitable relationship, enhancing shareholder value, or sustaining a rich and rewarding environment for its employees, the fundamental driving force is 'Empowered People; Enduring Relationships.'

Sonata believes in blending innovation with software engineering and a successful Global Delivery Model that complements its mission of 'Think Customer.' Today, Sonata is profitable and flourishing.

Built around the latest technologies, its Centres of Excellence are focused on proactively building competency and providing cutting-edge solutions to its customers. The swiftness to learn, the smartness to innovate and the ability to bring out the best software engineering services makes Sonata an intellectual partner to work with.

Products and Services offered by the company:

Product:

  • Commercial Software
  • Product Management
  • Product Engineering
  • Product Support
  • Product QA Services
  • Captives
  • Quantified Agile +
  • Embedded Systems
  • Embedded Services - Breadth of Expertise

Services:

  • Enterprise Solutions
  • Application Management
  • Managed Testing
  • Infrastructure Management

The company also provide services to manufacturing, construction and telecom sectors

Other group companies

TUI InfoTec GmbH- TUI InfoTec GmbH is a joint venture between Sonata Software Ltd. and TUI, Europe's largest tourism group. Sonata has a majority stake in TUI InfoTec, which provides a portfolio of services comprising IT operations and IT services. TUI InfoTec's basket of IT operations includes Infrastructure Management, Help Desk and Hosting services, while it also offers IT Services such as Application Development, Application Management, Business Intelligence and Managed Testing. Working in conjunction with development centres in India, TUI InfoTec incorporates economically efficient offshoring strategies into its global service delivery model. TUI InfoTec employs around 440 IT professionals in Germany.

Sonata Software FZ – LLC- Sonata Software FZ – LLC, a hundred per cent owned subsidiary of Sonata Software Limited provides value-based IT solutions to customers in the Middle East. Its objective is to unite and firm up our presence in the region.

Sonata Information Technology Ltd.- Sonata Information Technology Limited (SITL), a wholly-owned subsidiary of Sonata Software Ltd., is a premier software services and product distribution company with India-focused business operations. Its major business activities include:

Product Marketing: Operating through seven Branch Offices across India and a 1000-strong reseller network, SITL is a leading distributor of software products for international companies like Microsoft, Oracle and IBM.

Business Solutions: A part of SITL since 1995, the Business Solutions Group has been offering Scala ERP solutions to organizations across India and the SAARC region. Currently, there are more than 45 client organizations that have implemented Scala ERP.

IT Consulting: The IT Consulting Group offers software consulting services in the areas of e-Commerce, GroupWare, CRM and Business Intelligence for Indian organizations. Having alliances with Oracle and Lotus (Notes/ Domino), the client names include Hindustan Lever Ltd., Philips, Nokia, BPL, Wipro and GE.

Offshore Digital Services Inc- Sonata holds a 100% stake in Offshore Digital Services Inc (ODSi), which is headquartered in Fremont, California. ODSi operates in the US market and provides development and consulting services to clients, using an onsite-offshore delivery model. With help from Sonata's offshore development center, ODSi executes its projects both onsite and offshore, providing a cost advantage to the clients.

Achievements/ recognition:

  • Ranked global #2 in the 2008 Top Ten ESO: Outsourced Software Development in The Black Book of Outsourcing
  • NASSCOM’s Top 20 IT Software and Service Exporters list for FY07-08
  • Winner in the Deloitte Technology Fast 50 India 2008 program
  • Winner in the Deloitte Technology Fast 500 Asia Pacific 2008 program
  • Microsoft Gold Certification for competency in Information Worker Solutions
  • Microsoft-approved partner for SharePoint Deployment Planning Services (SDPS)
  • D&B – ECGC Indian Exporters’ Excellence Awards
  • 2011 - Listed among Global Services Top 100 Companies for FY 2010-2011
    Featured in Global Services' list of Emerging Infrastructure Management Vendors and Top Speciality Product Engineering Vendors for FY 2010-2011
    Ranked among Top 50 companies by Dataquest for FY 2010 - 2011
    2013 - Cloud Partner of the Year – India - 2013
    SI Partner of the Year – India - 2013
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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